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Bank loans must be repaid even if you lose your job

Dubai - There is no legal option available to put the loan repayment installments on hold if the borrower loses his employment.

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I have been working in a multinational company for the last five years. Just last month, my company terminated about 200 staff members and more terminations are expected. I currently have a loan with a UAE bank that is to be repaid in 47 months. If my company terminates me, is there any way legally to put the payments on hold. Would I be able to legally get a new job in Dubai and change my visa with an outstanding bank loan?
The bank will consider repayment of a bank loan and your employment as two unrelated issues and repayment of bank loan should not relate to your employment. Once you avail a loan from a bank, you are liable and responsible to pay the installments on timely basis even if you are not employed. There is no legal option available to put the loan repayment installments on hold if the borrower loses his employment, unless the bank agrees to put on hold repayment of loan installments.

KNOW THE LAWNormally, there shall be no hindrance in change of your employment visa status to a new employer even though you have an outstanding bank loan provided you take the bank in confidence of such a change by providing them with necessary information related to your new employment.

The bank has all the right to file a complaint against you for recovery of loan amount in full one-time settlement if you don't pay your loan installments for three consecutive months or six non-consecutive months. This is in accordance with Article 4 (4) of (draft) personal loan agreement issued by the Central Bank of the UAE via notice no. 3692/2012 dated 17/07/2012 to all banks and finance companies in the UAE under the subject: 'general terms and conditions and loan agreements-texts drafted and approved by the Emirates Banks Association. It states: "The loan elapses and all the installments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law in the event of borrower failing to pay three consecutive installments or six nonconsecutive installments of the monthly installments without approval of the bank."
Normally, there shall be no hindrance in change of your employment visa status to a new employer even though you have an outstanding bank loan provided you take the bank in confidence of such a change by providing them with necessary information related to your new employment. 

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Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, Singapore and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.